Diedrich Coffee’s Loss Widens

Diedrich Coffee Inc., which recently agreed to sell its company-owned stores to Starbucks, said its loss for the fiscal fourth quarter widened, in part because of costs related to boosting its wholesale operations.

The loss for the quarter ended June 28 widened to $3.1 million, or 59 cents a share, from $1 million, or 20 cents, a year ago. Results from a year earlier were helped by a tax benefit of $1.9 million.

Revenue rose to $18.3 million from $16.3 million, primarily driven by a 32% increase in revenue at the wholesale segment. The retail operation posted a 3.5% gain in sales at stores open at least a year.

The higher revenue was offset by an increase in costs. The Irvine company’s wholesale operations sold an increased amount of lower-margin products and the company was also forced to outsource some production of its K-Cup products when orders outstripped capacity. Operating expenses rose because of an increase in doubtful accounts and additional costs for beefing up the staff of the wholesale operations.

For the year, Diedrich posted a loss of $8 million, or $1.47 a share, on revenue of $59.4 million. That compared with a profit of $14.6 million, or $2.80, on revenue of $52.5 million.

Diedrich shares fell 1 cent to $4.03.